Concerns that general election won’t change the ‘broken’ housing market

Prime Minister Rishi Sunak called a surprise snap election yesterday in a statement at Downing Street – both Sunak and Sir Keir Starmer are both expected to appear in public on Friday before the election campaign starts.

The country will go to the polls on July 4th after the Prime Minister’s statement in front of No.10 and has promised voters a ‘secure future’. Those in conveyancing have noted that the decision to call an election comes after a drop in inflation and improvements to the economy, but others have warned that whoever the public votes to be the country’s next government the housing market is still ‘broken’.

The Residential Freehold Association (RFA) have expressed concerns regarding the Leasehold and Freehold Reform Bill that is currently being pushed through parliament, warning that ‘any last minute amendment to cap ground rents would land the next government with a £30bn compensation bill’. A spokesperson for The Residential Freehold Association, said:

“The Leasehold and Freehold Reform Bill is a defective and poorly evidenced piece of legislation which has ignored the outcomes of consultation with industry and leaseholders alike.

“Pushing this Bill through without proper scrutiny will have disastrous consequences for leaseholders who will be left on the hook with rising costs.

“Any last-minute amendment to retrospectively cap ground rents would land the next government with a £30bn compensation bill and an enormous hill to climb to repair the UKs reputation as a safe place to invest.”

Evidence given by the Open Property Data Association (OPDA) to the Levelling Up, Housing and Communities Select Committee’s inquiry has called for the homebuying process to be digitised within three years. This comes after Minister Mike Freer’s visit to Australia, where firms explored new lawtech technology with a view to implementing the more streamlined house buying system seen in Australia- in the UK. OPDA bosses have called the current system ‘sluggish’ and hope there is more ‘good cheer for voters’ with potential interest rate cuts. Maria Harris, chair of the Open Property Data Association (OPDA) has said:

“After challenging local election results, positive economic news such as a drop in inflation will be a key factor in firing the campaign starting gun. It will be interesting to see whether there is more good cheer for voters in terms of interest rate cuts.

Whichever party forms the next Government, we continue to deal with the challenges of a broken housing market. New ministers will need to tackle these urgently.  Top of the list should be digitising our property data and resolving the notoriously sluggish homebuying process. The Open Property Data Association recently gave evidence to The Levelling Up, Housing and Communities Select Committee’s ‘Improving the home buying and selling process’ inquiry, calling for the entire home buying and selling process to be digitised within three years. We appreciate the issues with supply and quality of housing but sharing digital property information across the housing market is a vital first step towards improving customer confidence in the homebuying and moving process and will slash contract exchange times significantly contributing millions to GDP.”

Linz Darlington, MD of leasehold extension at homehold commented on the Prime Minister’s announcement yesterday saying:

“For leaseholders who have been putting off doing a lease extension in the hope that the Conservatives would make it cheaper and easier in 2024, it seems likely they will be sorely disappointed.”

Other in the industry have expressed hopes that the general election will make the nation’s housing market a political priority, re-visiting a cut in stamp duty and addressing the ‘stress’ surrounding the homebuying process. A PCS Legal partner says that the current conveyancing climate is ‘fragmented and in need of an overhaul’. Stuart Forsdike, Founding Partner of PCS Legal,

“The upcoming General Election will undoubtedly bring the housing market, and hopefully the conveyancing process, to the forefront of the political agenda. Many are hopeful that this will lead to a cut in stamp duty, alleviating some of the financial burden of moving and helping to stimulate market activity.

“However, the issues facing the housing market go beyond just stamp duty. The entire moving process is currently so fragmented and stressful that it acts as a significant deterrent to potential movers. The complexity and inefficiency of the conveyancing process alone contributes to this stress and requires reform.

“A complete overhaul to make the moving process more fluid and straightforward should be a priority on the agenda of all political parties. High costs and cumbersome procedures are major barriers to mobility in the housing market. Addressing these issues by simplifying and making the process more transparent could lead to increased activity and satisfaction among homeowners and buyers alike, ultimately benefiting the wider economy.”

The Law Society noted that calling an election is overall a ‘pivotal moment’ for the justice system, with the legal sector contributing £60bn to the UK economy and ‘plays an important role in growth. Law Society of England and Wales president, Nick Emmerson, said:

“The upcoming general election is a pivotal moment for our justice system. The legal sector contributes £60bn to the economy and plays an important role in securing economic growth. Delivering access to justice is vital for our justice system and all political parties must commit to upholding the rule of law and narrowing the justice gap to create a fairer, more accessible system for all.”